Harman backs overhaul of Prop. 13

Zachary Coile, OF THE EXAMINER STAFF

Published 4:00 am, Thursday, May 21, 1998

1998-05-21 04:00:00 PDT CALIFORNIA -- Stepping boldly - or perhaps recklessly - into the contentious debate over Proposition 13, Rep. Jane Harman said she would push to narrow the gap between what new home buyers and longtime homeowners pay in property taxes.

The Democratic candidate for governor said the landmark 1978 anti-tax measure unfairly penalizes new home buyers by taxing their property at higher assessed values.

At an editorial board meeting with The Examiner, Harman said she would ask long-term property owners to "pay a bit more, and the folks who've just come in to pay a bit less."

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"I don't want to hurt people on fixed incomes," Harman said. "On the other hand, I think that some equity among property owners makes sense."

Harman stopped in San Francisco Wednesday for a fund-raiser at the Hilton Hotel, where she announced her endorsement by Sen. Dianne Feinstein.

The three-term congresswoman said the endorsement will boost her campaign with just two weeks to go before the June 2 primary.

Her proposal on property taxes raised eyebrows among both advocates and critics of Prop. 13, who say politicians who suggest tinkering with the measure do so at their peril.

"Proposition 13 is almost the third rail of California politics," said Lenny Goldberg, executive director of the California Tax Reform Association, which supports changes in property taxes. "The fact that she is willing to say we have to look at this, however it comes out, is certainly something I would applaud and encourage."

Prop. 13, passed by California voters 20 years ago next month, sought to fix the inflation-induced problem of soaring property taxes that were forcing some poor and elderly residents out of their homes.

The measure capped property taxes at 1 percent of the price at the time a home is sold, and rolled back assessed property values to 1975 levels. It also wiped out yearly assessments based on inflation and barred counties from increasing property taxes by more than 2 percent a year.

Many homeowners praise Prop. 13 for providing predictable property tax rates. On the other hand, the measure has been criticized as unfair to new home buyers, who can pay twice as much or more in taxes as the longtime owners of homes of similar value.

"The concept of Proposition 13 is valid," Harman said, but "I would like to correct some of the inequities of the property taxes paid between two people who live next door to each other in virtually identical homes, one of whom has been a homeowner since 1975, the other who has just bought the home recently."

Harman offered no specifics, saying she would consult with cities and counties to work on the formula.

Goldberg said the proposal could be carried out with either a carrot for new home buyers (a tax exemption) or a stick for longtime property owners (a transfer tax when a home is sold). Anti-tax groups would likely fight any new tax vigorously and Harman has pledged not to raise taxes as governor.

"I think at this point Proposition 13 is well embedded in the psyche of the voters and property owners of California," Uhler said. "To make a change would take a heavy-duty education program. The solution would have to be fair, equitable and no more burdensome that the situation under Proposition 13."

Assemblyman Tom McClintock, R-Simi Valley, an ardent Prop. 13 backer, said voters knew about the inequity in tax rates in 1978 and still passed the measure by a wide margin.

"A new home buyer in 1997 will be paying more for a home and more for taxes, but they also have the certainty that their payments are not going to go up over time," McClintock said. "The same provision protects the new home buyer as the old-time buyer."

Public opinion seems to favor leaving Prop. 13 alone. A recent Field Poll found that 53 percent of voters would vote for the measure again, while only 30 percent would oppose it.

UC-Berkeley political science Professor Ray Wolfinger said Harman's task of selling her position is daunting, but not impossible. He points out that former Connecticut Gov. Lowell Weicker got the state's first income tax enacted, despite strong opposition from legislators and voters' aversion to new taxes.

"It isn't as if a state-level politician has never killed a sacred cow before," Wolfinger said. "Sometimes they do, but it takes skill." &lt;